UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 1934
 For the quarterly period endedJune 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the transition period from  to
 Commission File Number 000-13232
 Juniata Valley Financial Corp.
  Pennsylvania
    
    23-2235254(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 Bridge and Main Streets, Mifflintown, Pennsylvania
    
    17059(Address of principal executive offices)
    
    (Zip Code)
 
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
  Class
    
    Outstanding as of August 9, 2008Common Stock ($1.00 par value)
    
    4,381,855 shares




---



##### 



TABLE OF CONTENTS
 PART I  FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsConsolidated Statements of Financial Condition
as of June 30, 2008 and December 31, 2007 (Unaudited)
    
    
    3Consolidated Statements of Income for the Three and Six
Months Ended June 30, 2008 and 2007 (Unaudited)
    
    
    4Consolidated Statements of Changes in Stockholders Equity
for the Six Months Ended June 30, 2008 and 2007 (Unaudited)
    
    
    5Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 2008 and 2007 (Unaudited)
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis
of Financial Condition and Results of Operations
    
    
    14Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    22Item 4.
    
    Controls and Procedures
    
    
    23PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    24Item 1A.
    
    Risk Factors
    
    
    24Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    24Item 3.
    
    Defaults upon Senior Securities
    
    
    24Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    25Item 5.
    
    Other Information
    
    
    25Item 6.
    
    Exhibits
    
    
    25Signatures
    
    
    26
 2




---



##### 



PART I  FINANCIAL INFORMATION  Item 1. Financial Statements
 Juniata Valley Financial Corp. and Subsidiary  Consolidated Statements of Financial Condition
 June 30,
    
    
    December 31,2008
    
    
    2007ASSETSCash and due from banks
    
    $
    13,015
    
    
    $
    12,254Interest bearing deposits with banks
    
    
    80
    
    
    
    770Federal funds sold
    
    
    
    
    
    
    7,500Cash and cash equivalents
    
    
    13,095
    
    
    
    20,524Interest bearing time deposits with banks
    
    
    5,325
    
    
    
    5,525Securities available for sale
    
    
    74,696
    
    
    
    67,056Restricted investment in Federal Home Loan Bank (FHLB) stock
    
    
    1,389
    
    
    
    1,095Investment in unconsolidated subsidiary
    
    
    3,065
    
    
    
    2,972Total loans, net of unearned interest
    
    
    308,837
    
    
    
    298,000Less: Allowance for loan losses
    
    
    (2,412
    )
    
    
    (2,322
    )Total loans, net of allowance for loan losses
    
    
    306,425
    
    
    
    295,678Premises and equipment, net
    
    
    7,525
    
    
    
    7,272Bank owned life insurance and annuities
    
    
    12,350
    
    
    
    12,344Core deposit intangible
    
    
    366
    
    
    
    389Goodwill
    
    
    2,046
    
    
    
    2,046Accrued interest receivable and other assets
    
    
    5,641
    
    
    
    5,245Total assets
    
    $
    431,923
    
    
    $
    420,146LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Deposits:Non-interest bearing
    
    $
    49,043
    
    
    $
    48,755Interest bearing
    
    
    319,999
    
    
    
    310,702Total deposits
    
    
    369,042
    
    
    
    359,457Securities sold under agreements to repurchase
    
    
    5,680
    
    
    
    5,431Short-term borrowings
    
    
    1,500
    
    
    
    Other interest bearing liabilities
    
    
    1,069
    
    
    
    1,037Accrued interest payable and other liabilities
    
    
    5,897
    
    
    
    5,649Total liabilities
    
    
    383,188
    
    
    
    371,574Stockholders Equity:Preferred stock, no par value:Authorized - 500,000 shares, none issuedCommon stock, par value $1.00 per share:Authorized - 20,000,000 shares
Issued - 4,745,826 shares
Outstanding -
4,386,153 shares at June 30, 2008;
4,409,445 shares at December 31, 2007
    
    
    4,746
    
    
    
    4,746Surplus
    
    
    18,311
    
    
    
    18,297Retained earnings
    
    
    33,490
    
    
    
    32,755Accumulated other comprehensive loss
    
    
    (654
    )
    
    
    (557
    )Cost of common stock in Treasury:359,673 shares at June 30, 2008;
336,381 shares at December 31, 2007
    
    
    (7,158
    )
    
    
    (6,669
    )Total stockholders equity
    
    
    48,735
    
    
    
    48,572Total liabilities and stockholders equity
    
    $
    431,923
    
    
    $
    420,146
  3




---



##### 



Juniata Valley Financial Corp. and Subsidiary
Consolidated Statements of Income
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Interest income:Loans, including fees
    
    $
    5,497
    
    
    $
    5,733
    
    
    $
    11,023
    
    
    $
    11,353Taxable securities
    
    
    394
    
    
    
    607
    
    
    
    840
    
    
    
    1,113Tax-exempt securities
    
    
    282
    
    
    
    192
    
    
    
    528
    
    
    
    363Federal funds sold
    
    
    44
    
    
    
    108
    
    
    
    114
    
    
    
    196Other interest income
    
    
    66
    
    
    
    64
    
    
    
    141
    
    
    
    126Total interest income
    
    
    6,283
    
    
    
    6,704
    
    
    
    12,646
    
    
    
    13,151Interest expense:Deposits
    
    
    2,294
    
    
    
    2,698
    
    
    
    4,740
    
    
    
    5,291Securities sold under agreements to repurchase
    
    
    18
    
    
    
    68
    
    
    
    44
    
    
    
    134Short-term borrowings
    
    
    1
    
    
    
    
    
    
    
    1
    
    
    
    Other interest bearing liabilities
    
    
    7
    
    
    
    10
    
    
    
    16
    
    
    
    19Total interest expense
    
    
    2,320
    
    
    
    2,776
    
    
    
    4,801
    
    
    
    5,444Net interest income
    
    
    3,963
    
    
    
    3,928
    
    
    
    7,845
    
    
    
    7,707Provision for loan losses
    
    
    112
    
    
    
    23
    
    
    
    144
    
    
    
    90Net interest income after provision for loan losses
    
    
    3,851
    
    
    
    3,905
    
    
    
    7,701
    
    
    
    7,617Noninterest income:Trust fees
    
    
    94
    
    
    
    106
    
    
    
    217
    
    
    
    223Customer service fees
    
    
    414
    
    
    
    421
    
    
    
    806
    
    
    
    808Earnings on bank-owned life insurance and annuities
    
    
    112
    
    
    
    117
    
    
    
    236
    
    
    
    221Commissions from sales of non-deposit products
    
    
    172
    
    
    
    144
    
    
    
    383
    
    
    
    370Income from unconsolidated subsidiary
    
    
    51
    
    
    
    43
    
    
    
    93
    
    
    
    84Securities impairment charge
    
    
    (393
    )
    
    
    (33
    )
    
    
    (393
    )
    
    
    (33
    )Gain (loss) on sale of securities
    
    
    28
    
    
    
    (8
    )
    
    
    41
    
    
    
    (8
    )Gain (loss) on sales of other assets
    
    
    59
    
    
    
    (1
    )
    
    
    53
    
    
    
    (1
    )Gain from life insurance proceeds
    
    
    179
    
    
    
    
    
    
    
    179
    
    
    
    Other noninterest income
    
    
    206
    
    
    
    192
    
    
    
    439
    
    
    
    355Total noninterest income
    
    
    922
    
    
    
    981
    
    
    
    2,054
    
    
    
    2,019Noninterest expense:Employee compensation expense
    
    
    1,302
    
    
    
    1,303
    
    
    
    2,557
    
    
    
    2,490Employee benefits
    
    
    255
    
    
    
    348
    
    
    
    692
    
    
    
    752Occupancy
    
    
    240
    
    
    
    218
    
    
    
    472
    
    
    
    456Equipment
    
    
    177
    
    
    
    177
    
    
    
    356
    
    
    
    344Data processing expense
    
    
    337
    
    
    
    331
    
    
    
    671
    
    
    
    655Director compensation
    
    
    113
    
    
    
    116
    
    
    
    227
    
    
    
    235Professional fees
    
    
    85
    
    
    
    110
    
    
    
    169
    
    
    
    214Taxes, other than income
    
    
    129
    
    
    
    148
    
    
    
    260
    
    
    
    286Amortization of intangibles
    
    
    12
    
    
    
    12
    
    
    
    23
    
    
    
    23Other noninterest expense
    
    
    295
    
    
    
    309
    
    
    
    559
    
    
    
    585Total noninterest expense
    
    
    2,945
    
    
    
    3,072
    
    
    
    5,986
    
    
    
    6,040Income before income taxes
    
    
    1,828
    
    
    
    1,814
    
    
    
    3,769
    
    
    
    3,596Provision for income taxes
    
    
    431
    
    
    
    500
    
    
    
    970
    
    
    
    1,003Net income
    
    $
    1,397
    
    
    $
    1,314
    
    
    $
    2,799
    
    
    $
    2,593Earnings per shareBasic
    
    $
    0.32
    
    
    $
    0.30
    
    
    $
    0.64
    
    
    $
    0.58Diluted
    
    $
    0.32
    
    
    $
    0.30
    
    
    $
    0.64
    
    
    $
    0.58Cash dividends declared per share
    
    $
    0.18
    
    
    $
    0.42
    
    
    $
    0.36
    
    
    $
    0.59Weighted average basic shares outstanding
    
    
    4,390,838
    
    
    
    4,437,527
    
    
    
    4,396,985
    
    
    
    4,443,834Weighted average diluted shares outstanding
    
    
    4,398,055
    
    
    
    4,447,006
    
    
    
    4,404,367
    
    
    
    4,453,367
  4




---



##### 



Juniata Valley Financial Corp. and Subsidiary
Consolidated Statements of Changes in Stockholders Equity
 Six Months Ended June 30. 2008Number
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulatedof
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalShares
    
    
    Common
    
    
    
    
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    StockholdersOutstanding
    
    
    Stock
    
    
    Surplus
    
    
    Earnings
    
    
    Loss
    
    
    Stock
    
    
    EquityBalance at December 31, 2007
    
    
    4,409,445
    
    
    $
    4,746
    
    
    $
    18,297
    
    
    $
    32,755
    
    
    $
    (557
    )
    
    $
    (6,669
    )
    
    $
    48,572Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,799
    
    
    
    
    
    
    
    
    
    
    
    2,799Change in unrealized losses on securities
available for sale, net of reclassification adjustment and tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (97
    )
    
    
    
    
    
    
    (97
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,702Implementation of EITF 06-4, Accounting
for Deferred Compensation and
Postretirement Benefit Aspects of
Endorsement Split-Dollar Life Insurance
Arrangements (Note B)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (480
    )
    
    
    
    
    
    
    
    
    
    
    (480
    )Cash dividends at $0.36 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,584
    )
    
    
    
    
    
    
    
    
    
    
    (1,584
    )Stock-based compensation activity
    
    
    
    
    
    
    
    
    
    
    24
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24Purchase of treasury stock, at cost
    
    
    (27,155
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (566
    )
    
    
    (566
    )Treasury stock issued for stock option
and stock purchase plans
    
    
    3,863
    
    
    
    
    
    
    
    (10
    )
    
    
    
    
    
    
    
    
    
    
    77
    
    
    
    67Balance at June 30, 2008
    
    
    4,386,153
    
    
    $
    4,746
    
    
    $
    18,311
    
    
    $
    33,490
    
    
    $
    (654
    )
    
    $
    (7,158
    )
    
    $
    48,735
 Six Months Ended June 30, 2007Number
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulatedof
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalShares
    
    
    Common
    
    
    
    
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    StockholdersOutstanding
    
    
    Stock
    
    
    Surplus
    
    
    Earnings
    
    
    Loss
    
    
    Stock
    
    
    EquityBalance at
December 31,
2006
    
    
    4,457,934
    
    
    $
    4,746
    
    
    $
    18,259
    
    
    $
    31,531
    
    
    $
    (1,098
    )
    
    $
    (5,652
    )
    
    $
    47,786Comprehensive
income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,593
    
    
    
    
    
    
    
    
    
    
    
    2,593Change in
unrealized
losses on
securities
available
for sale,
net of
reclassification
adjustment
and tax
effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (244
    )
    
    
    
    
    
    
    (244
    )Total
comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,349Cash dividends
at $0.59 per
share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,618
    )
    
    
    
    
    
    
    
    
    
    
    (2,618
    )Stock-based
compensation
activity
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20Purchase of
treasury stock,
at cost
    
    
    (26,500
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (557
    )
    
    
    (557
    )Treasury stock
issued for stock
option
and stock
purchase
plans
    
    
    2,686
    
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    52
    
    
    
    47Balance at June
30, 2007
    
    
    4,434,120
    
    
    $
    4,746
    
    
    $
    18,274
    
    
    $
    31,506
    
    
    $
    (1,342
    )
    
    $
    (6,157
    )
    
    $
    47,027
  5




---



##### 



Juniata Valley Financial Corp. and Subsidiary
Consolidated Statements of Cash Flows
 Six Months Ended June 30,2008
    
    
    2007Operating activities:Net income
    
    $
    2,799
    
    
    $
    2,593Adjustments to reconcile net income to net cash provided by operating activities:Provision for loan losses
    
    
    144
    
    
    
    90Provision for depreciation
    
    
    338
    
    
    
    323Net amortization of securities premiums
    
    
    83
    
    
    
    72Amortization of core deposit intangible
    
    
    23
    
    
    
    23Securities impairment charge
    
    
    393
    
    
    
    33Net realized (gains) losses on sales of securities
    
    
    (41
    )
    
    
    8(Gains) losses on sales of other assets
    
    
    (53
    )
    
    
    1Earnings on bank owned life insurance and annuities
    
    
    (236
    )
    
    
    (221
    )Gain from life insurance proceeds
    
    
    (179
    )
    
    
    Deferred income tax benefit
    
    
    (59
    )
    
    
    (3
    )Equity in earnings of unconsolidated subsidiary, net of dividends of $0 and $87
    
    
    (93
    )
    
    
    3Stock-based compensation expense
    
    
    24
    
    
    
    20Increase in accrued interest receivable and other assets
    
    
    (766
    )
    
    
    (148
    )(Decrease) increase in accrued interest payable and other liabilities
    
    
    (200
    )
    
    
    210Net cash provided by operating activities
    
    
    2,177
    
    
    
    3,004Investing activities:Purchases of:Securities available for sale
    
    
    (35,217
    )
    
    
    (34,639
    )Securities held to maturity
    
    
    
    
    
    
    (3,955
    )FHLB stock
    
    
    (294
    )
    
    
    Premises and equipment
    
    
    (591
    )
    
    
    (118
    )Bank owned life insurance and annuities
    
    
    (66
    )
    
    
    (81
    )Proceeds from:Sales of securities available for sale
    
    
    
    
    
    
    591Maturities of and principal repayments on
securities available for sale
    
    
    26,995
    
    
    
    16,646Maturities of securities held to maturity
    
    
    
    
    
    
    2,500Redemption of FHLB stock
    
    
    
    
    
    
    108Bank owned life insurance and annuities
    
    
    37
    
    
    
    39Life insurance claims
    
    
    438
    
    
    
    Sale of other real estate owned
    
    
    210
    
    
    
    191Sale of other assets
    
    
    322
    
    
    
    Net decrease in interest-bearing time deposits
    
    
    200
    
    
    
    135Net (increase) decrease in loans receivable
    
    
    (10,891
    )
    
    
    4,594Net cash used in investing activities
    
    
    (18,857
    )
    
    
    (13,989
    )Financing activities:Net increase in deposits
    
    
    9,585
    
    
    
    9,704Net increase in short-term borrowings and securities
sold under agreements to repurchase
    
    
    1,749
    
    
    
    403Cash dividends
    
    
    (1,584
    )
    
    
    (2,618
    )Purchase of treasury stock
    
    
    (566
    )
    
    
    (557
    )Treasury stock issued for employee stock plans
    
    
    67
    
    
    
    47Net cash provided by financing activities
    
    
    9,251
    
    
    
    6,979Net decrease in cash and cash equivalents
    
    
    (7,429
    )
    
    
    (4,006
    )Cash and cash equivalents at beginning of period
    
    
    20,524
    
    
    
    17,778Cash and cash equivalents at end of period
    
    $
    13,095
    
    
    $
    13,772Supplemental information:Interest paid
    
    $
    4,936
    
    
    $
    5,447Income taxes paid
    
    $
    1,175
    
    
    $
    1,025Supplemental schedule of noncash investing and financing activities:Transfer of loans to other real estate owned
    
    $
    
    
    
    $
    52
  6




---



##### 



Juniata Valley Financial Corp. and Subsidiary
      Accounting for Post Retirement Benefit Obligations
    7




---



##### 



8




---



##### 



Three Months Ended June 30, 2008
    
    
    Three Months Ended June 30, 2007Before
    
    
    Tax Expense
    
    
    
    
    
    
    Before
    
    
    Tax ExpenseTax
    
    
    or
    
    
    Net-of-Tax
    
    
    Tax
    
    
    or
    
    
    Net-of-TaxAmount
    
    
    (Benefit)
    
    
    Amount
    
    
    Amount
    
    
    (Benefit)
    
    
    AmountNet income
    
    $
    1,828
    
    
    $
    431
    
    
    $
    1,397
    
    
    $
    1,814
    
    
    $
    500
    
    
    $
    1,314Other comprehensive income:Unrealized losses on available for sale securities:Unrealized losses arising during the period
    
    
    (1,118
    )
    
    
    (380
    )
    
    
    (738
    )
    
    
    (476
    )
    
    
    (162
    )
    
    
    (314
    )Unrealized losses from unconsolidated subsidiary
    
    
    (14
    )
    
    
    
    
    
    
    (14
    )
    
    
    
    
    
    
    
    
    
    
    Less reclassification adjustment for:(gains) losses included in net income
    
    
    (28
    )
    
    
    (10
    )
    
    
    (18
    )
    
    
    8
    
    
    
    3
    
    
    
    5securities impairment charge
    
    
    393
    
    
    
    134
    
    
    
    259
    
    
    
    33
    
    
    
    11
    
    
    
    22Other comprehensive income (loss)
    
    
    (767
    )
    
    
    (256
    )
    
    
    (511
    )
    
    
    (435
    )
    
    
    (148
    )
    
    
    (287
    )Total comprehensive income
    
    $
    1,061
    
    
    $
    175
    
    
    $
    886
    
    
    $
    1,379
    
    
    $
    352
    
    
    $
    1,027
 Six Months Ended June 30, 2008
    
    
    Six Months Ended June 30, 2007Before
    
    
    Tax Expense
    
    
    
    
    
    
    Before
    
    
    Tax ExpenseTax
    
    
    or
    
    
    Net-of-Tax
    
    
    Tax
    
    
    or
    
    
    Net-of-TaxAmount
    
    
    (Benefit)
    
    
    Amount
    
    
    Amount
    
    
    (Benefit)
    
    
    AmountNet income
    
    $
    3,769
    
    
    $
    970
    
    
    $
    2,799
    
    
    $
    3,596
    
    
    $
    1,003
    
    
    $
    2,593Other comprehensive income:Unrealized losses on available for sale securities:Unrealized losses arising during the period
    
    
    (497
    )
    
    
    (169
    )
    
    
    (328
    )
    
    
    (411
    )
    
    
    (140
    )
    
    
    (271
    )Unrealized losses from unconsolidated subsidiary
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    Less reclassification adjustment for:(gains) losses included in net income
    
    
    (41
    )
    
    
    (14
    )
    
    
    (27
    )
    
    
    8
    
    
    
    3
    
    
    
    5securities impairment charge
    
    
    393
    
    
    
    134
    
    
    
    259
    
    
    
    33
    
    
    
    11
    
    
    
    22Other comprehensive income (loss)
    
    
    (146
    )
    
    
    (49
    )
    
    
    (97
    )
    
    
    (370
    )
    
    
    (126
    )
    
    
    (244
    )Total comprehensive income
    
    $
    3,623
    
    
    $
    921
    
    
    $
    2,702
    
    
    $
    3,226
    
    
    $
    877
    
    
    $
    2,349
 9




---



##### 



(Amounts, except earnings per share, in thousands)Three Months
    
    
    Three MonthsEnded
    
    
    EndedJune 30, 2008
    
    
    June 30, 2007Net income
    
    $
    1,397
    
    
    $
    1,314Weighted-average common shares outstanding
    
    
    4,391
    
    
    
    4,438Basic earnings per share
    
    $
    0.32
    
    
    $
    0.30Weighted-average common shares outstanding
    
    
    4,391
    
    
    
    4,438Common stock equivalents due to effect of stock options
    
    
    7
    
    
    
    9Total weighted-average common shares and equivalents
    
    
    4,398
    
    
    
    4,447Diluted earnings per share
    
    $
    0.32
    
    
    $
    0.30
 Six Months
    
    
    Six MonthsEnded
    
    
    EndedJune 30, 2008
    
    
    June 30, 2007Net income
    
    $
    2,799
    
    
    $
    2,593Weighted-average common shares outstanding
    
    
    4,397
    
    
    
    4,444Basic earnings per share
    
    $
    0.64
    
    
    $
    0.58Weighted-average common shares outstanding
    
    
    4,397
    
    
    
    4,444Common stock equivalents due to effect of stock options
    
    
    7
    
    
    
    9Total weighted-average common shares and equivalents
    
    
    4,404
    
    
    
    4,453Diluted earnings per share
    
    $
    0.64
    
    
    $
    0.58
    10




---



##### 



Three Months Ended
    
    Six Months EndedMarch 31,
    
    June 30,(Dollar amounts in thousands)
    
    2008
    
    2007
    
    2008
    
    2007Components of net periodic pension costService cost
    
    $
    45
    
    
    $
    69
    
    
    $
    90
    
    
    $
    143Interest cost
    
    
    110
    
    
    
    96
    
    
    
    220
    
    
    
    195Expected return on plan assets
    
    
    (106
    )
    
    
    (100
    )
    
    
    (212
    )
    
    
    (190
    )Additional recognized amounts
    
    
    9
    
    
    
    13
    
    
    
    18
    
    
    
    26Net periodic pension cost
    
    $
    58
    
    
    $
    78
    
    
    $
    116
    
    
    $
    174
       11




---



##### 



12




---



##### 



Securities Available for Sale.
 Impaired Loans
  Level 1
    
    Level 2
    
    Level 3
    
    Total FairInputs
    
    Inputs
    
    Inputs
    
    ValueSecurities
available for sale
    
    
    
    
    
    $
    74,696
    
    
    
    
    
    
    $
    74,696
      13




---



##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
            14




---



##### 



June 30,
    
    December 31,
    
    Change2008
    
    2007
    
    $
    
    %Deposits:Demand, non-interest bearing
    
    $
    49,043
    
    
    $
    48,755
    
    
    $
    288
    
    
    
    0.6
    %NOW and money market
    
    
    75,188
    
    
    
    74,821
    
    
    
    367
    
    
    
    0.5
    %Savings
    
    
    38,932
    
    
    
    33,877
    
    
    
    5,055
    
    
    
    14.9
    %Time deposits, $100,000 and more
    
    
    38,411
    
    
    
    36,308
    
    
    
    2,103
    
    
    
    5.8
    %Other time deposits
    
    
    167,468
    
    
    
    165,696
    
    
    
    1,772
    
    
    
    1.1
    %Total deposits
    
    $
    369,042
    
    
    $
    359,457
    
    
    $
    9,585
    
    
    
    2.7
    %
  June 30,
    
    
    December 31,
    
    
    Change2008
    
    
    2007
    
    
    $
    
    
    %Loans:Commercial
    
    $
    95,480
    
    
    $
    91,679
    
    
    $
    3,801
    
    
    
    4.1
    %Mortgage
    
    
    136,535
    
    
    
    127,324
    
    
    
    9,211
    
    
    
    7.2
    %Home Equity
    
    
    62,110
    
    
    
    63,678
    
    
    
    (1,568
    )
    
    
    (2.5
    %)Installment
    
    
    14,712
    
    
    
    15,319
    
    
    
    (607
    )
    
    
    (4.0
    %)Total loans
    
    $
    308,837
    
    
    $
    298,000
    
    
    $
    10,837
    
    
    
    3.6
    %
  Periods Ended June 30,2008
    
    
    2007Balance of allowance  January 1
    
    $
    2,322
    
    
    $
    2,572Loans charged off
    
    
    (73
    )
    
    
    (173
    )Recoveries of loans previously charged off
    
    
    19
    
    
    
    37Net charge-offs
    
    
    (54
    )
    
    
    (136
    )Provision for loan losses
    
    
    144
    
    
    
    90Balance of allowance  end of period
    
    $
    2,412
    
    
    $
    2,526Ratio of net charge-offs during period to
average loans outstanding
    
    
    0.02
    %
    
    
    0.05
    %
  15




---



##### 



(Dollar amounts in thousands)
    
    June 30, 2008
    
    December 31, 2007Non-performing loansNonaccrual loans
    
    $
    1,263
    
    
    $
    Accruing loans past due 90 days or more
    
    
    665
    
    
    
    837Restructured loans
    
    
    
    
    
    
    Total
    
    $
    1,928
    
    
    $
    837Average loans outstanding
    
    $
    300,843
    
    
    $
    300,607Ratio of non-performing loans to
average loans outstanding
    
    
    0.64
    %
    
    
    0.28
    %
     Comparison of the Three Months Ended June 30, 2008 and 2007
   16




---



##### 



Three Months EndedJune 30,2008
    
    2007Return on average assets (annualized)
    
    
    1.31
    %
    
    
    1.24
    %Return on average equity (annualized)
    
    
    11.42
    %
    
    
    11.17
    %Average equity to average assets
    
    
    11.43
    %
    
    
    11.08
    %Non-interest income, excluding securities
gains (losses), as a percentage of average
assets (annualized)
    
    
    1.20
    %
    
    
    0.96
    %Non-interest expense as a percentage of
average assets (annualized)
    
    
    2.75
    %
    
    
    2.89
    %
          17




---



##### 



18




---



##### 



Comparison of the Six Months Ended June 30, 2008 and 2007
    Six Months EndedJune 30,2008
    
    2007Return on average assets (annualized)
    
    
    1.32
    %
    
    
    1.23
    %Return on average equity (annualized)
    
    
    11.51
    %
    
    
    10.90
    %Average equity to average assets
    
    
    11.48
    %
    
    
    11.30
    %Non-interest income, excluding securities gains
(losses), as a percentage of average assets
(annualized)
    
    
    1.14
    %
    
    
    0.98
    %Non-interest expense as a percentage of average
assets (annualized)
    
    
    2.82
    %
    
    
    2.87
    %
        19




---



##### 



20




---



##### 



21




---



##### 



Item 3. Quantitative and Qualitative Disclosures About Market Risk
        22




---



##### 



Change in NetInterest Income
    
    Change in NetChange in
    
    
    
    Due to Interest
    
    Interest Income
    
    Total Change inInterest Rates
    
    
    
    Rate Risk
    
    Due to Imbedded
    
    Net Interest(Basis Points)
    
    
    

    (Static)
    
    Options
    
    Income200
    
    
    
    
    $
    (51
    )
    
    $
    192
    
    
    $
    141100
    
    
    
    
    
    (25
    )
    
    
    82
    
    
    
    570
    
    
    
    
    
    
    
    
    
    
    
    
    
    -100
    
    
    
    
    
    25
    
    
    
    23
    
    
    
    48-200
    
    
    
    
    
    51
    
    
    
    115
    
    
    
    166
   Item 4. Controls and Procedures
 Disclosure Controls and Procedures
    23




---



##### 



Changes in Internal Control Over Financial Reporting
  PART II  OTHER INFORMATION
 Item 1.
    
    LEGAL PROCEEDINGSIn the opinion of management of the Corporation, there are no legal proceedings
pending to which the Corporation or its subsidiary is a party or to which their
property is subject, which, if determined adversely to the Corporation or its
subsidiary, would be material in relation to the Corporations or its subsidiarys
financial condition. There are no proceedings pending other than ordinary routine
litigation incident to the business of the Corporation or its subsidiary. In
addition, no material proceedings are pending or are known to be threatened or
contemplated against the Corporation or its subsidiary by government authorities.Item 1A.
    
    RISK FACTORSThere have been no material changes in risk factors that were disclosed in the
Annual Report on Form 10-K as of December 31, 2007.Item 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDSThe following table provides information on repurchases by the Corporation of its
common stock in each month of the quarter ended June 30, 2008:
 Total Number ofShares Purchased as
    
    Maximum Number ofTotal Number
    
    Average
    
    Part of Publicly
    
    Shares that May Yet Beof Shares
    
    Price Paid
    
    Announced Plans or
    
    Purchased Under thePeriod
    
    Purchased
    
    per Share
    
    Programs
    
    Plans or Programs (1)April 1-30, 2008
    
    
    3,000
    
    
    $
    20.85
    
    
    
    3,000
    
    
    
    73,966May 1-31, 2008
    
    
    5,800
    
    
    
    20.69
    
    
    
    5,800
    
    
    
    68,166June 1-30, 2008
    
    
    3,830
    
    
    
    21.20
    
    
    
    3,830
    
    
    
    64,336Totals
    
    
    12,630
    
    
    $
    20.88
    
    
    
    12,630
    
    
    
    64,336
 (1)
    
    On March 23, 2001, the Corporation announced plans to buy back 100,000 (200,000 on a post-split
basis) shares of its common stock. There is no expiration date to this buyback plan, but
subsequent to the initial plan, the repurchase of 400,000 additional shares were authorized by the
Board of Directors. As of August 8, 2008, the number of shares that may yet be purchased under the
program was 59,336. No repurchase plan or program expired during the period covered by the table.
The Corporation has no stock repurchase plan or program that it has determined to terminate prior
to expiration or under which it does not intend to make further purchases.
 Item 3.
    
    DEFAULTS UPON SENIOR SECURITIESNot applicable
 24




---



##### 



Item 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSThe Annual Meeting of Shareholders of Juniata Valley Financial Corp. was held
on May 20, 2008. At the Annual Meeting, the shareholders elected 5 Class C
directors to serve until the 2011 Annual Meeting, as described below:
 Withhold
    
    Abstentions /Name
    
    For
    
    Authority
    
    Broker Non-votesJoe E. Benner
    
    
    3,082,458
    
    
    
    33,029
    
    
    
    0Francis J. Evanitsky
    
    
    3,096,816
    
    
    
    18,671
    
    
    
    0Philip E. Gingerich, Jr.
    
    
    3,100,486
    
    
    
    15,001
    
    
    
    0Dale G. Nace
    
    
    3,093,923
    
    
    
    21,564
    
    
    
    0Jan G. Snedeker
    
    
    3,101,832
    
    
    
    13,655
    
    
    
    0
 The terms of the following directors continued after the annual meeting:
Timothy I. Havice, Charles L. Hershberger, Ronald H. Witherite, A. Jerome
Cook, Martin L. Dreibelbis, Marshall L. Hartman, Robert K. Metz and Richard
M. Scanlon.There were no other matters considered at the meeting.Item 5.
    
    OTHER INFORMATIONNoneItem 6.
    
    EXHIBITS3.1   Amended and Restated Articles of Incorporation (incorporated
by reference to Exhibit 4.1 to the Corporations Form S-3 Registration
Statement No. 333-129023 filed with the SEC on October 14, 2005)3.2   Bylaws (incorporated by reference to Exhibit 3.2 to the
Corporations report on Form 8-K filed with the SEC on December 21, 2007)31.1  Rule 13a  14(a)/15d  14(a) Certification of President and
Chief Executive Officer31.2  Rule 13a  14(a)/15d  14(a) Certification of Chief
Financial Officer32.1  Section 1350 Certification of President and Chief Executive
Officer (furnished, not filed)32.2  Section 1350 Certification of Chief Financial Officer
(furnished, not filed)
 25




---



##### 



Juniata Valley Financial Corp.
(Registrant)Date 08-08-2008
    By:
    /s/ Francis J.EvanitskyFrancis J. Evanitsky, Presidentand Chief Executive OfficerDate 08-08-2008
    By:
    /s/ JoAnn N. McMinnJoAnn N. McMinn, Chief FinancialOfficer 26